Research On Driving Forces Of Environmental Management By Firms

With the rising attention of environmental problem, now environmental 'management of firm has becomes one research hotspot. It is a key of solving environmental problem how to manage environment from passive to active, and how to incorporate environmental concern with strategic management. Basesd on one big survey from companies, this paper explores the relationship between the comprehensiveness of environmental management, environmental performance and economic performance through modeling method.1 .This study brings forward a systemic conceptual framework reflecting the relationship of the incentives of environmental management, environmental performance and economic performance (EP)to establish basis for the following EMBirical research.2.Existing literatures look single environmental practice as the result of environmental management, but this paper advances one conception "the comprehensiveness of environmental management" to measure effort and effect of environmental management, and using 13 kinds of environmental management practices(EMBs) as proxy variable , i.e. count variable. In order to address the limitations of the discrete nature of the dependent variable, two alternative approaches are used. In first approach, the count of EMBs is used as a cardinal measure, ( POSSION model);In the second approach the count of EMBs is used to obtain an ordinal measure,(Ordered Probit model) .The analysis indicates that there is strong correlation among EMBs, it is not suitable using single EMB as regressand;mean value of internal EMBs is higher than that of external EMBs, indicating that firms pay more attention to internal EMBs. Based on POSSION model and OP model, according to three factors: regulation pressures, market pressures and specific attributes, this paper identifies out key factors of environmental management and designs parameters to test the impact of the driving factors on EMBs ,the analysis shows parts variables of regulation pressures and market pressures haves positive correlation to EMBs, and the negative reflect of investors toward firms with bad environmental performance will influence the financing abilities and competitive advantages.The study takes the expected value of EMBs from POSSION model and OP model as instrument together with the incentives as independent variable to test impact of EMBs on environmental performance through 2SLS, the result shows this impact of regulation pressures on reducing pollution is statistically significant at the 5 percent level, the pressures from consumers and investors is statistically strong significant;in additional, the impact of EMBs is not significant, indicating that more firms don't treat environmental management seriously and don't coorperate them with strategic management.3.The study uses the improved Wagner et al. (2002) 's model to test the relationship between environmental performance and economic performance through simultaneous equation models using , the result shows that the impact of environmental performance on short benefit based on accounting measure is negative significant, but the impact on long benefit based on market-value measure is positive significant over period of time. In a word, environmental management is a kopis, firms should master suitable degree;meanwhile environmental management is a long process, firms shouldn't be anxious to be success.